As regards representative samples, most experimental economists work with a convenience sample of subjects – traditional college students. This is true for all corruption studies reviewed above. In fact, as regards the articles and papers reviewed in Dusek et al. (2005) only Barr et al. (2003) employ non-traditional subjects (Ethiopean nursing students). A simple way to address this issue is to run control treatments with other, less convenient, but arguably more representative samples. Babicky & Ortmann (2005), for example, recently conducted a battery of simple bargaining experiments (dictator, ultimatum, and Lizal & Ortmann (2003) argue that a similar leniency mechanism is also a key provision of recent Czech anti-bribery legislation.

See Lizal & Ortmann (2003) and Ortmann & Richmanova (in prep).

trust games) with employees of Prague City Hall (which has a reputation of being among the most corrupt institutions in the Czech Republic.10) As regards representative stimuli, most studies follow the convention among experimental economists of using

Abstract

laboratory environments. The bribery game in AIR (2002), for example, is not framed in terms of bribe-giving or bribetaking (but see Abbink & Hennig-Schmidt 2002), nor is the rotation experiment in Abbink (2004) framed as such, nor is the Falk & Fischbacher (2000) experiment framed as a stealing experiment. In fact, only the experiments by Barr et al.

(2003) and Frank & Schulze (2000, 2003) feature aspects of real life in their setups.11 Babicky, Ortmann & Semerak (in prep) have attempted to address some of the methodological issues (e.g., the issue of “asset legitimacy”, see Cherry, Frykblom & Shogren 2002) but there should be no question that the issue of representative stimuli remains a severely understudied area.

Probably the toughest challenge to the external validity of experiments on corruption, corruptibility, and anti-corruption measures is the issue of calibration (i.e., to what extent the models underlying experimental tests are small-scale replicas of the real world, or the “field”). The results of Barr et al. (2003) exemplify the problem: Can the numbers – a 200 percent in wage increases affecting only 30% reduction in corruption – guide policy considerations in field contexts? Or, how do the clever but ultimately simplistic experiments of Frank & Schulze (2000) and Schulze & Frank (2003) translate into policy guidance, if at all?

Conclusion

Even though the set of experiments on corruption and corruptibility is currently rather small, and even though there are tough methodological questions associated with these kinds of experiments, some reliable patterns have emerged from the experiments already conducted: For example, it seems clear that the welfare-reducing effects on third parties do not affect corrupt behavior (e.g., AIR 2002; Abbink 2002). This suggests that clean-hands campaigns or attempts to change the public sense of propriety through advertising in metro and trams are not likely to be successful in curbing corruption. Deterrence, it also Controlling for basic socio-demographic characteristics such as age and sex, and a measure of computer literacy/cognitive ability, our preliminary data analysis suggest that it is not the people per se that work in City Hall that are the problem but the institutional arrangements; a view supported by the results of the V4 City Corruption Propensity Index of Transparency International CR (www.transparency.cz; Ortmann 2004.) That said, the absence of a loyalty effect of higher wages and the intrinsic motivation effect of the risk of punishment may have only limited external validity. In real-life situations, it is the principal himself who may induce loyalty or intrinsic motivations by offering higher wages or promising not to audit the agents. In the experiment, higher wage and risk of punishment were controlled by the experimenters, who were not connected with the principal (the film club) in a way that would meaningfully induce some loyalty.

seems clear, does work. Increasing the probability of detecting bribe-giving and bribe-taking and the size of the punishment does by and large restrain corrupt behavior (e.g., AIR 2002; Frank & Schulze 2000; Schulze & Frank 2003; see also ADS 2004). Higher wages of officials -- through the threat of losing a well-paying job if detected -- reduce corruption, but only when officials face the risk of detection and punishment (e.g., Frank & Schulze 2000, Schulze & Frank 2003;

Azfar & Nelson 2003; Barr et al. 2003; but see Abbink 2002). The results of Barr et al. (2003) suggest, though, that any increase in wages has to be considerable to effect significant reductions in corruption. The results of Falk & Fischbacher (2002) and Babicky, Ortmann & Semerak (2006) strongly suggest that the extent of corruption in a society is a major determinant of corruptibility. And there can be little doubt that skillful design and implementation of laws and regulations can overcome the distant past of a country (e.g., Spagnolo 2004; ADS 2004;

Buccirossi & Spagnolo 2006; Ortmann & Richmanova 2006).

Experiments are not the panacea that everyone doing research on the determinants of corruption and corruptibility is desperately looking for but they do allow us to address many questions in systematic and relatively low-cost ways. If for example, someone objects to the efficiency gains (or losses) used in a particular experiment, it is easy to test the robustness of the experimental results with another parameterization. If someone objects to the stakes being too small to be telling us something, the experimenter can always scale them up. (Even then experiments may be a low-cost means of exploring the effects of detection probabilities, penalty sizes, and their interactions, and the importance of people’s perceptions of the pervasiveness of corruption in society.) All things considered, laboratory experiments seem a promising strategy to designing and implementing incentive-compatible and effective anti-corruption measures.

References:

Abbink, K. (2002), Fair Salaries and the Moral Costs of Corruption. CeDEx Working Paper 2002-5, University of Nottingham.

Abbink, K. (2004), Staff rotation as an anti-corruption policy: an experimental study. European Journal of Political Economy, forthcoming.

Azfar, O. & Nelson, W.R.J. (2003), Transparency, wages, and the separation of power. An experimental analysis of the causes of corruption. Working Paper, U of New York (Buffalo), featured in Transparency International 2004 yearbook.

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